Restructure Medicare & Medicaid: Economic Factors—
Reimbursement Reform Is Easier Said than Done Owing to Political Sensitivity...
Percentage Contribution to Medicare Medical Cost Growth Rate by Spending Type, 2019E
Nursing Home &
Home Health Hospital Care
All Other
Rx Drugs Physician & Clinical Services
(@)E] www.kpeb.com
Key Issues:
- Consumers understandably do not like constraints on their care location.
- Doctors, nurses and hospitals are fulfilling a difficult task at the core of the healthcare delivery system.
- Care providers are very important to local communities.
- Local hospitals are large employers.
- Many hospitals are struggling financially.
Source: Data per CMS’ National Health Expenditure database, Doug Simpson, Morgan Stanley Healthcare Research.
USA Inc. | What Might a Turnaround Expert Consider? 299
Restructure Medicare & Medicaid: Economic Factors— Healthcare Service Providers are Already “Underpaid” by Government
USA Community Hospital Profit Margins & Inpatient Discharges by Payor Class
32%
Profit margins by payor class (%), 2007
Percent of total inpatient discharges, by payor class (%), February
Profit margins from patients with employer sponsored insurance are sufficient to leave hospital industry with positive overall margin, despite being only 36% of inpatient discharges.
Reimbursement cuts to Medicare and/or Medicaid would pose significant challenges, as hospitals already realize negative margins from those payor classes.
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2007, for community hospitals. Morgan Stanley Healthcare Research.
2009 Employer _ ecnenee Insurance
(@ 2] www.kpcb.com
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